Overview

This report provides both a three year longitudinal assessment of new account fraud statistics, as well as the solutions-authentication and otherwise-that best address new account fraud risks. Due in large part to regulatory pressures, much of financial institutions' security enhancement strategy is focused on the authentication of existing account-holders. New account fraud (both "true name" and "synthetic"), however, represents a large percentage of identity fraud and new solutions are needed now.

Primary Questions

• What strategic changes will the pattern and growth of new account identity fraud require?
• What are the barriers for solutions that address new account identity fraud?
• What types of accounts are primary targets for new account fraud?
• What solutions-authentication and otherwise-best address new account fraud risks?

Findings and Analysis

Knowledge Based Authentication solutions address both existing account and new account fraud. They can be utilized by FIs to mitigate new account fraud and more efficiently expand account bases. New account fraud is growing, with Javelin data showing 51 percent growth in 2005, with the most prevalent increases among new credit card accounts. FIs are and will continue to face pressure from both consumers and from regulators to rein in new account fraud.

Overview Primary Questions Findings & Analysis New Account Fraud is Up Dramatically Credit Card Issuers Experience Four Times as Much New Account Fraud Both Consumer and Regulatory Pressures Will Define Anti-Fraud Solutions Appendix Section 1: Features of Identity Verification Products Section 2: Examples of Identity Verification Products Related Research

Table of Figures

• Figure 1: New Account Fraud Is Up Dramatically Despite Increased Use of Automation
• Figure 2: Credit Card Issuers Experience Four Times as Much New Account Identity Fraud
• Figure 3: Both Consumer and Regulatory Pressures Will Define Anti-Fraud Solutions that Banks Implement
• Figure 4: Leverage Authentication Solutions to Mitigate New Account Fraud